Market Profile trade scenarios

good thread.

this thread is one of the few (remaining) reasons i return to ET.


i would just add that MP levels are not neccessarily black and white regarding VAs, and initiative vs. responsive activity anymore. imho, with increasing arbitrage, scalping, and tons of players in ES that follow MP, the traditioal MP levels don't hold the same importance they once had.

in the group i trade with we watch MP levels and how they interplay with market internals. sorry, but i can't say anymore.

one thing i will share is that more and more MP followers are also using composite profiles of more then one day. you can merge profiles together that have overlapping VAs, which gives you a longer term view, or a a veiw of what the longer term players are doing are trying to do.
 
In your new example, the buyers appear to be in control. You may expect the market to make its daily-low during the first hour. You may want to let the "opening balance" set itself up and then attempt to initiate longs below the POC, offset longs above the POC and initiate shorts upon new upside range extension as a rough guideline. The market should rally easier than it falls. That can keep you off of the sidelines and in the game.
 
Quote from nazzdack:

In your new example, the buyers appear to be in control. You may expect the market to make its daily-low during the first hour. You may want to let the "opening balance" set itself up and then attempt to initiate longs below the POC, offset longs above the POC and initiate shorts upon new upside range extension as a rough guideline. The market should rally easier than it falls. That can keep you off of the sidelines and in the game.
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So basically, wait until opening-VA is formed by opening range and then trade that VA?

Interesting, you used words "initiate" long/shorts below/above POC. But really those are responsive trades. You expect buyers to be in control, yet, you trade this as a range/expect reversion to the mean. Which may makes sense if you trade from both sides and/or expect a breakout on one of the sides.

But the price may never get below POC. Moreover, it may never pullback from above later in the day to this newly formed POC, thus you would be shorting into up market. Something does not connect here for me... Hm, one could buy back when price drives down to newly formed/dynamic UVA also? This is more likely in a strong uptrend.

Why not trade this initiatively? Perhaps go with range extension out of IB, place a stop below opening range LVA and see where it takes you?
 
you can garner a great deal of free information from cisco-futures and don jones (or you can take one of two courses too), he has been doing MP for a long time. there are opportunities to develop your own strategies. normally it takes a few days to form a balance. you can either be a responsive trader, or trade the b/o from the balance. don looks at trader participation and identifies traders by category from commercial to retail. dalton has two books that also clearly outline MP. there are also a couple of traders who have been affiliated with jones, et al who run their own MP training and services. in an effort to make it easier to comprehend many have glossed over the details. MP is unique from technical trading, although some indicators have been derived from MP in order to give you an idea of what kind of trade you might expect and the probability of success (see Tom Drinka from Western Illinois University, who has been teaching MP for several years, has recently introduced an indicator via Market Delta). p.s. I have no commercial or personal affiliation with any of the above mentioned people. s.a. CBOT's "market profile" section under "Education" and you can download the "MP handbook."
 
hi, what market internals are you referring to? TICKS or market delta thingys. thanks.

Quote from xxxskier:

good thread.

this thread is one of the few (remaining) reasons i return to ET.


i would just add that MP levels are not neccessarily black and white regarding VAs, and initiative vs. responsive activity anymore. imho, with increasing arbitrage, scalping, and tons of players in ES that follow MP, the traditioal MP levels don't hold the same importance they once had.

in the group i trade with we watch MP levels and how they interplay with market internals. sorry, but i can't say anymore.

one thing i will share is that more and more MP followers are also using composite profiles of more then one day. you can merge profiles together that have overlapping VAs, which gives you a longer term view, or a a veiw of what the longer term players are doing are trying to do.
More...
 
Quote from TraderD:

I am new to MP. There appears to be a contradiction which I would like to talk about. I think it could bring up interesting discussion.

Here are 2 standard MP axioms:

1) If price opens above previous days VA, and drives down to previous days VA, one should buy at UVA and then at POC.

2) If price opens above previous days VA, and drives down to previous days UVA/VA and then gets accepted in VA, then price is likely to drive down through the whole VA.

Knowing odds implied by case #2, why would it make sense in scenario #1 to try to enter at POC after entry at UVA failed? I know that one can trade that way, but would not it be a lower probability entry vs entry at UVA?

Now, suppose the price drove down as described in scenario #2. Is buying at LVA level as good of a trade as buying earlier at UVA?
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Hi TraderD,

I think #2 is the 80% rule where price gets accepted for at least 2 POCs wide... 1 hour... but who knows. Never traded 80% rule in my life.

Regards,
cook
 
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